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Ullman: Private labels and promotions back in the spotlight at JCPenney

Plano, Texas - Five weeks after returning to the helm, JCPenney ceo Mike Ullman said the company's immediate priorities are to restore traffic and drive sales.
While he didn't repudiate the "transformation" strategy pursued by former ceo Ron Johnson during yesterday evening's analyst call, the criticism was implicit in several of his remarks - which also included some positive commentary about what went on during Ullman's 18-month hiatus from the corner office.
For starters, the shop-in-shops that were pivotal to Johnson's vision of a 21st Century JCPenney have been relegated to the status of "attractions." Ullman placed them third in importance to driving the business, with Penney private label brands leading the way, followed by national brands. While the core brands are the most promotional, "they also tend to be the most profitable," he said.
Ullman praised the improved store appearance and gave a thumb's up to the Johnson-implemented Joe Fresh apparel and Happy Chic by Jonathan Adler brands in particular.
"Our plan is for these and other new brands to be available at JCPenney alongside several newly restored private brands, as I mentioned, particularly the $1 billion St. John's Bay women's sportswear brand and Arizona, as well as exclusives like Liz Claiborne, each of which has been updated with exciting styles," he added.

The company will also boost the assortment of basics within its core brands. Shops in place for Sephora - Penney's most successful department -Levi, Izod, Liz Claiborne, Arizona and jcp will remain in place. But in contrast to Johnson, who planned to create 100 shop-in-shops, Ullman said: "We aren't going to set a specific number of shops. We will test and build out the ones that customers clearly want."

Penney will also reconcile the operations of its brick-and-mortar stores with its ecommerce business, which under the previous leadership had largely run as its own entity and saw sales volume plummet last year. Store and online assortments will be aligned to store associates can turn to the dot.com business to help customers who can find what they're looking for during an in-store visit.

As it returns to more promotional retailing, JCPenney is test-marketing new messaging before going national, said Ullman.

"We've obviously been dark for a long period of time, in terms of the way that customer expects to shop with us. We've had the home store closed for an extended period of time, and home is probably the most promotional part of a department store," he added.

 

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